Crossed lines and a king's tantrum
King Mswati III is blocking attempts to liberalise the mobile telephone market in Swaziland and promote a cheaper service for ordinary Swazis in a bid to protect his private business interests, government sources in the kingdom have told the Mail & Guardian.
Mswati is widely known to have a 10% stake in Swazi MTN, which currently enjoys a monopoly.
Sources in the kingdom said that Mswati had intervened to prevent the parastatal Swaziland Posts and Telecommunications Corporation (SPTC) from selling its share in MTN and entering the market itself.
In 2010 Swazi MTN, whose 10-year monopoly officially ended in 2008 but continues, launched a court case against the corporation to stop it from rolling out its new-generation mobile network.
The high court ruled in the corporation’s favour, but the finding was reversed on appeal and then went to an international arbitrator, which last month ordered the corporation to shut down its mobile network after finding that it had entered the market while retaining its 41% shareholding in MTN, in breach of a joint venture agreement.
However, the king is said to be blocking the sale of the corporation’s stake.
The International Monetary Fund observed last year that Swaziland’s cellphone tariffs were among the highest in the region and recommended that the government issue an international tender for a new licence.
This has not happened.
Indeed, Swazi MTN is pressing the government to give it an international gateway, after it was given a 3G network licence by the authorities last year.
The corporation, which is also the industry regulator, had initially refused MTN such a licence.
Another highly placed source from the parastatal alleged that Mswati had been influenced by Prime Minister Barnabas Dlamini, himself a 4% shareholder in Swazi MTN.
“The prime minister is leading the crusade against SPTC,” said the source.
The corporation is losing money on its fixed-line operation, which is why it wants to enter the mobile market.
But government spokesperson Percy Simelane said the claims “are not only defamatory and insulting ... but are also baseless and lack factual evidence”.
He said questions about MTN’s shareholder structure had to be put to the company.
In 2009, Mswati allegedly ordered the dismissal of SPTC managing director Nathi Dlamini, who wrote to the shareholders — Mswati, MTN International and Swaziland Empowerment Limited (SEL), a consortium of Swazi businessmen, including the prime minister, with a 19% stake — informing them that SPTC had decided to sell about 20% of its shareholding in Swazi MTN.
In a letter dated June 10 2009, he said that the corporation was willing to sell 3.39% to the king, 10.17% to MTN International and 6.4% to Swaziland Empowerment Limited at between R17-million and R19-million a share.
He gave them 30 days to respond before the offer went public.
Although the move complied with the terms of the joint venture agreement, a well-placed source said that Mswati threw a tantrum, stopped the sale and ordered that Dlamini’s contract should not be renewed.
“The king felt Dlamini should have first asked him how much of the shareholding he wanted,” said the source.
“In Swazi custom you can’t allocate a portion to the king; you must ask how much he wants.”
The king was reportedly also furious about the time given to him and other shareholders to respond because he did not know whether the required capital to buy the corporation’s share could be raised in a month.
Dlamini was subsequently arrested on August 14 2009 and charged with corruption for allegedly refusing to furnish an Anti-Corruption Commission official with documents pertaining to the mobile telephony project.
The case is still pending.
Then followed a bewildering round of tit-for-tat dismissals, starting with the corporation’s board’s withdrawal of its representatives on the board of Swazi MTN on the grounds that they no longer represented its interests.
In response, Information and Communications Technology Minister Nelisiwe Shongwe fired the corporation’s board, but reinstated it after Parliament threatened a vote of no confidence in her.
The king promptly fired Shongwe.
Swazi MTN said it would not discuss the “confidential” issue of its shareholding.
However, it said it had proposed that it and the corporation should be “separated completely in shareholding and regulation” to allow for fair competition.
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